DAVOS DISENCHANTMENT 

LACK OF CONSENSUS IN TACKLING THE WORLD’S ECONOMIC WOES 

Renee Horne- London 3 February 2012

In the picturesque Swiss Alpine resort of Davos the world’s top 1% consisting of business and political titans gathered for five days of deliberations to discuss a wide range of topics from the environment to fixing capitalism. Instead of achieving consensus, this exclusive club was split, with business leaders more optimistic about the future than economists and political leaders.  At the start of the conference, expectations were high given the World Economic Forum’s (WEF) 2012 motto, “Great Transformation and Shaping of Models”, a commitment to improving the state of the world. However, when the final curtain fell, the forum’s overall statement, “In short, the outlook, after a week of intense discussion, is of a troubled world pressed for solutions across a number of fronts, but with optimism provided by human ingenuity and progress”.  From this statement it appears that Davos, which aimed for big resolutions ultimately fell flat.  Reports stated that “while the forum's annual meeting attracted a record 2,600 leaders….Missing were the big debates and announcements that had made the forum a top agenda setter in past years”.  So what can one take away from a DISAPPOINTING DAVOS 2012? 

COMPANY SURVIVAL

In the current global economic crisis, many businesses are closing down. Panellists agreed that the average “life span of companies that are unable to change is around 15 years”.  John T Chambers, CEO of Cisco systems stated, “We had about 100 great competitors in the 1990s. All but two are largely gone. If a company continues to do what it has always been doing, it is going to be left behind”.  Indeed today’s companies are under pressure to constantly look to the future because of technology. A topical case in point is Kodak which has always led the world in aspects of photography. It recently declared bankruptcy as it was unable to keep abreast due to the rise of digital photography. At Davos, the message was clear; to survive companies must constantly re-invent themselves and become socially responsible: “The key to success is to become and to be seen to become a good corporate citizen”.  Panellists agreed that “business must do good and must be seen to do good as well. This is essential in a world where consumers, suppliers, employees, shareholders and other stakeholders have full access to information and make decisions based on that knowledge”.  Klaus Kleinfeld, Chairman and CEO, Alcoa, warned that “Businesses can no longer pretend to be good corporate citizens when they are not. You will be quickly found out.” Today the key to corporate success is talented individuals.  A socially responsible and environmentally sustainable company needs to recruit and retain talented employees, especially the young.  The era of companies’ competitiveness which primarily focuses on capital is over. Hence companies need to enhance education and training initiatives. For example, Alcoa, the world's third largest producer of aluminium is partnering with community colleges in the United States to upgrade the skills of welders and industrial maintenance workers. “Fundamental to wealth creation is education,” said Kleinfeld.  

THE BOTTOM BILLION

Announced at the forum was the initiative that provides 1 billion mobile phone users living in poverty access to educational phone apps. Mobile technology is a powerful platform for those who do not have access to quality education and basic skills training. Currently under development, AppBridge is an online platform to encourage talented software developers to link up with non-governmental organisations (NGOs) and community organisations to produce apps that will tackle poverty among the “bottom billion”. President Leonard Schlesinger of Babson College, a founding partner of AppBridge said, “Babson College is enthusiastic about our partnership with AppBridge to extend and apply our methodology of Entrepreneurial Thought and Action to accelerate economic and social value creation everywhere.”  AppBridge is the innovation of a group of Young Global Leaders who are part of the World Economic Forum community of over 700 exceptional leaders and social entrepreneurs under the age of 40 from business, government, civil society and academia who share a commitment to improving the state of the world. The Young Global Leaders will pilot the non-profit initiative later this year. Professor Klaus Schwab, Executive Chairman and Founder of the World Economic Forum said "We are encouraged not only by the vision of these Young Global Leaders to improve the state of the world, but by their ability to translate it into scaled action. We at the Forum are committed to supporting AppBridge and their partners on this remarkable journey.”

Davos 2012 has seen some concrete initiatives but there still exists conflicting positions on how to tackle the global economic crisis.  Lack of consensus could mean that the pledges at the conference are less likely to be implemented. Indeed, critics of Davos still see the forum as a “self-indulgent, elitist and disconnected from its original purpose of attempting to do good in the world by involving and informing those who hold the reins of power”.  Ultimately is Davos 2012, another talk shop with no action?  Have your say….